Updates on Productivity and Innovation Credit

Most businesses in Singapore are familiar with PIC grants. This scheme was launched in 2010 by IRAS and initially, this scheme is supposed to end in YA 2015 but was extended until YA 2018.

Most of the SME tapped into the scheme for their purchase of IT and automation software and hardware such as computers, printers, website and etc. They could benefit from a cash payout of 40% (up to S$100,000 per YA) or 400% deduction for up to $400,000 ($600,000 under PIC +) per YA.

Just for your information from 2013 to 2015, the scheme provides PIC bonus. This component provides dollar to dollar matching incentive for PIC cash payout.

Just to add since 1st of August 2016, IRAS had lowered PIC claim coverage to 40%. As a business consultant, I would like to highlight the useful information on the scheme in this article.

To recap on PIC scheme six qualifying activities

Description on PIC and six qualifying activities

The purpose of the scheme is to encourage small business to upgrade their equipment and improve business efficiency with 40% co-funding from the government. Six qualifying activities from the picture above includes;

Acquisition and leasing of PIC IT and automation equipment

Training of employees

Acquisition and licensing of intellectual property rights

Registration of patents, trademarks, designs and plant varieties

Research and Development

Investment in Design Projects

PIC claim 2018 for YA 2018

A lot of business owners had mistaken YA 2018 to be the year 2018 but in fact, it’s referring to the date of occurrence for your company expenditure. Therefore, You might want to refer to IRAS to understand if the dates of your purchase for qualifying expenditure. If you are unsure and required more information, feel free to email me or contact me at 91110936

This might be your last opportunity to file your application. In summary, I must confess that it is very useful to most of the SME in Singapore because it benefits the business by lowering cost on their investment for engaging in productive activities. It could be utilised to upgrade the information technology structure of a business.

Common FAQ for PIC scheme

Besides office automation, can I use the scheme for other purpose?

Most SME would utilise the scheme for the purchase of IT, automation and training but you could also use them on Intellectual Property (IP), Research and Project Design. If you feel that your purchase equipment is relevant to the productivity of the business, you could always write for approval on a case by case application.

Is it true that we could use the scheme for training?

Training of foreign employees applicable does not mix up the qualifying condition with other schemes such as WSQ, ETS or Skill Future for example.

Can I claim PIC bonus?

No, PIC Bonus ended in YA 2015.

My Business is a startup, can we use the scheme?

Yes, this scheme is helpful for startup so long as you fulfilled the qualifying condition.

But my company is NOT a local business

Not only startup, foreign companies could also utilise this scheme if you qualify.

Can I use the scheme for the equipment purchase last year?

For purchase of equipment back in 2016, it might be possible for you to still tap into the scheme for support.

Conclusion on Productivity and Innovation Credit (PIC grants) scheme

The scheme was supposed to be extended to YA 2015 but a lot of businesses had not tapped into the scheme. The government decided to extend the scheme to YA 2018. This intention was taken advantage by “Consultants”. This leads to the scheme being abused and this forces IRAS to review all PIC claims. It is sad to know of genuine business being caught in between the crossfire. As of 2018, 488 cases are being investigated according to Straits Time.

If you have previously made any claims using the scheme. Please keep your supporting documents in case of an audit. Documents include invoices, bank statement, pictures of the purchase (and as much evidence to prove that your purchase is geneuine).